Smartphones Take On Yet Another Role - Payment

A new report says that Apple is adding near-field communication technology to its iPad2 and iPhone5, with the goal of offering users payment capabilities for wireless transactions. Bloomberg reported the news first, citing Richard Doherty, director of the consulting firm Envisioneering Group. Among the capabilities, the device would be able to tap into user information Apple has on file, including credit-card numbers, iTunes gift card balances and bank data - information, it must be noted, that Apple has gone to great pains to keeping for itself rather than share with its publishing partners.

The appeal to consumers would be obvious. "Using the service, customers could walk into a store or restaurant and make payments straight from an iPad or iPhone," Doherty said. "They could also receive loyalty rewards and credits for purchases, such as when referring a friend, Doherty said."

Google's Lead

Google has also launched a similar initiative, although according to reports it doesn’t appear to be as far along as Apple is. The Nexus S smartphone‘s release has the necessary OS and the hardware, and now it is looking to build the NFC infrastructure as well, Fortune reported in early January 2011. Other new reports say that Google is also building out an NFC payment system.

Who Loses?

Companies that are likely to feel the effects of a smartphone-paying consumers include Paypal and newer entrants - namely AT&T, Verizon and T-Mobile, which are piloting similar technology. The NFC market may account for a third of the $1.13 trillion in global mobile-payment transactions projected for 2014, Fortune noted, pointing to IE Market Research figures. "It's a land grab," says Jaymee Johnson, a spokesman for Isis, the Visa venture (via Fortune). "Folks are sort of jockeying for position." "